TSMC Shares Jump 7.3% as Taiwan Stocks Rebound After Sharp Selloff
Key Facts
TSMC shares rose as much as 7.3% in Taipei trading on Monday, November 9, rebounding alongside chipmakers after a sharp selloff the previous week. Reuters, in a report published by The Edge Malaysia, said the market’s benchmark index climbed as much as 6.6%, its biggest percentage gain since July. The move came as Taiwanese stocks recovered more than 6%, according to the same report, after an earlier decline wiped trillions of dollars from global markets. TSMC shares closed at $388.62 in the session, while Nvidia closed at $178.67, according to EL7 data. The company’s stock stood at the center of the rebound, with TSMC accounting for about 40% of the weight of the Taiwan Stock Exchange, Reuters said.
At the close, Taiwanese stocks were up 4.9%, after rising more during the session, according to Reuters. The report said gains were led by heavyweight Taiwanese shares and followed a selloff tied to investor concerns about the effect of the U.S. midterm elections on the expansion of AI data centers. It said a Democratic victory fueled worries about tighter scrutiny of AI investments and infrastructure spending. The market’s recovery was therefore linked to a subsiding of the earlier selloff, rather than a confirmed announcement of a new deal in the chip sector. TSMC’s rise also coincided with reports circulating about potential plans for advanced memory, without establishing that the news was the sole cause of the stock’s move.
Alongside the rebound, Taiwan’s finance ministry said it was ready to deploy the National Financial Stabilization Fund, worth 500 billion New Taiwan dollars, according to Bloomberg in a November 6 report. Reuters reported that the fund had been authorized to intervene after the selloff, but the available information does not establish that authorities actually bought shares during Monday’s session. The announcement therefore concerned readiness or authorization to intervene, not confirmation that purchases were carried out in the market. Bloomberg also said short-selling curbs took effect alongside these measures. Taiwan’s official gazette published an order from the Financial Supervisory Commission on margin and short-selling transactions, which took effect on November 9, without the publicly available text specifying numerical limits for the curbs.
Plans by TSMC to produce 3D DRAM had appeared in separate reports before Monday’s session. On November 6, Reuters cited a report by The Information saying the company had begun sketching plans to produce the advanced memory at the request of Nvidia, its largest customer, citing two people familiar with the matter. Neither company immediately responded to Reuters’ request for comment, the report said. It did not specify when production might begin and said TSMC could opt to build new plants or buy an existing plant and convert it to memory production. The discussion is therefore about options under consideration, not a final decision to produce the memory or begin an industrial project.
TSMC describes 3D DRAM as an architecture that stacks memory cells vertically instead of placing them in a single horizontal layer, with the aim of increasing capacity. If the company enters the field, it would compete with Samsung, SK Hynix and Micron, according to the Reuters report. But a TSMC spokeswoman said on November 7 that the company “is focused at all times on its core business, which is contract manufacturing of integrated circuits.” The statement cautions against reading the plans described in the report as an announcement of a confirmed move into memory manufacturing. The report links interest in the idea to the company’s largest customer, but gives no production date and does not confirm that TSMC will build a facility for that purpose.
The market is tracking TSMC’s operating figures amid strong demand for chips. On its third-quarter earnings call on October 15, the company forecast fourth-quarter revenue of between $52.3 billion and $54.3 billion, equivalent to 14% quarter-on-quarter growth and 58% year-on-year growth at the midpoint of the range. The latest official monthly comparison available before the October announcement was consolidated September revenue of 511,857 million New Taiwan dollars, up 54.6% year on year. TSMC is scheduled to report October sales on November 10, according to its investor relations calendar. The release will provide a near-term indicator of actual demand for the month, after the market rebound put the company’s shares back in the spotlight.